My Podner duo in this episode is Andy Erskine and Bob Gappa of Management 2000, and they're going to talk with us today about the importance of customer loyalty, what drives it, and how to manage it. This discussion will benefit both new and seasoned franchisors.

Today's episode will be unique. This will be the first time to have a returning podner with the GREAT, Mr. Bob Gappa. You may remember Bob Gappa from Episode #2 where we discussed the nature of the relationship between franchisor and franchisee.

Andy has been Bob's Protégé for 8 years now as he's been learning franchising from the master and taking Bob's accumulated knowledge and adding his own flavor to it.

Time Stamps

Andy Erskine Intro

00:00:29

Segment 1

00:02:36

Get to know Andy

Segment 2

00:11:20

Topic Segment – Creating Customer Loyalty

Segment 3

01:05:10

Quickdraw Questions

Topics Discussed in this Episode

What is customer loyalty?

• Transaction count is NOT the same as customer loyalty.
• Another term for disloyalty (brand adultery)
• Customer loyalty is tightly woven into Brand, which is made up of the emotion that you create with your customers

What makes customers loyal?

• Loyalty is built around emotions and emotions come from the customer experience
• The way that you interact with your customer (operating system) is what creates positive or negative emotions.
• Repeat customers are a result of your team members creating an emotional bond with the customer through the delivery of your product or service.
• Brand standards should focus on creating the emotions that make customers want to talk about their experience with their sphere of influence and go back.
• The Operations Manual is in place to create customer loyalty.
• To understand what creates positive or negative emotions in a customer, we need to understand the customer journey.
• The customer journey is literally every interaction that a potential customer has with you before, during, and after doing business with you
• Visible versus invisible standards – both affect the customer and loyalty. Invisible standards are those not customer facing, like ordering a sufficient amount of material to deliver the product.
• The issue with system standards is that there isn't enough forceful compliance when they aren't being followed and there isn't enough positive reinforcement when they are, and so they don't seem important to either the franchisee or franchisor.
• Brand icons are as important to customer loyalty as brand standards. Brand icons are the aspects of your business that you are absolutely known for.
• Emptions are what create the brand rather than a well-known company.

How do you measure customer loyalty?

• Technology is how to track customer loyalty through cell phones and credit card transactions
• Knowledge is power. Know your customers behavior data and use that to create the emotional connection in them to make them loyal.
• By understanding what customers value, we can create customer loyalty
• Prism will segment your credit card transactions into demographics and behaviors

What do you do with customer loyalty data after you get it?

• Data helps you refine your message to your real customers – understanding what they value so you can deliver the value that they want, which in turn creates loyalty
• Don't confuse frequency due to convenience with loyalty.

What should I be doing today as it relates to customer loyalty?

• Start enhancing what it is that the customer values by understanding who the customer is.
• Stop thinking of yourself as a franchisor and start thinking about yourself as a steward of a brand.
• Stop having a franchisee advisory council and start having a brand advisory council
• Answer three critical questions. Know who your customers are. Know what they value. Know how to enhance what they value.
• Know how to make their experience personal.
• Help the customer make a connection to your brand
• Select employees, don't simply hire them.
• Focus on how to create a great place to work
• Team members should know that their job is to create an experience that makes the customer want to come back
• Training a team member is usually only focused on the activity, which is simply skills, knowledge, and abilities. In addition to that, you should focus on developing people's understanding and emotional commitment to the purpose of their job, which is to get the customer to want to come back.

Andy Erskine

Management 2000

www.mgmt2000.com

[email protected]

Phone - 800-847-5763

Kit Vinson

www.franman.net

[email protected]

214-736-3939 x 101

Books Mentioned in the Episode:

Love Marks

By Kevin Roberts

The Effective Executive

By Peter Drucker

Emotionomics

By Dan Hill

Retail is Theater